When the parliament approved the law on strategic investments in 2015, the government boasted that it would absorb foreign investors to Albania. But in these nine years, those investors who are ‘blessed’ as strategic are mostly Albanian entrepreneurs. Foreigners can be counted on the fingers of one hand. The government plans to postpone for the fifth time the deadline of the law that was approved as temporary. Below, find a timeline of the controversial law, from its promotion, the objections of the opposition, international reservations and experts warning of consequences.
Esmeralda Topi
In May 2015, the Socialists together with their governing ally, the LSI, approved with 73 votes the law on strategic investments .
“The law is based on what is called a fast lane in the administrative approach of local and foreign investors”, argued Arben Ahmetaj, then Minister of Economy.
The initiative aimed to encourage and attract strategic investments, in key sectors of the economy, through favorable, facilitating or accelerating procedures of support and services to investors.
The status of strategic investor was granted to any project in energy, transport, tourism and agriculture that invested 30 million euros, or 50 million euros for projects with a special procedure.
“A strategic investor who invests over 50 million euros in a sector will certainly be treated with priority, because the economy needs direct investments,” explained Arben Ahmetaj at the time.
Also, the status “Investment/strategic investor, special procedure” also benefited projects in sectors that were not defined in the law, provided that the value of the investment was 100 million euros.
From 2016 to 2023, 88 projects have sought to benefit from the status of investment or strategic investor. Of these, 40 have received the status, 14 projects have been rejected, while 34 are in the evaluation phase.
Most of these projects are in the tourism sector.
Although the law aimed to absorb foreign investments, in eight years, only Albanian companies benefited, except for “Durrës Yaht Marina” from investor Mohamed Alabar, of the United Arab Emirates.
How many times has the deadline of the law been postponed?
Approved as a temporary legal measure in 2015, the initiative was due to end in December 2018. But since then, the deadline has been postponed several times, with the argument that the Ministry of Finance intends to draft a new law.
For the first time, the deadline of the law was postponed at the proposal of the Council of Ministers, while three other times, the postponement came as a proposal from socialist MPs.
The last proposal bears the signature of the deputy Eduard Shalsi, at the same time Chairman of the Committee for Economy and Finance.
The amendments to the law on strategic investments proposed by Shalsi foresee:
- To significantly increase the minimum value of investment projects that apply for strategic status in each sector classified as strategic according to this law, in a value of no less than 50 million euros;
- to detail the procedure for submitting the project file and its evaluation by improving the review deadlines and highlighting the responsibilities that each line ministry has;
- to extend the deadline for submission of requests by interested investment entities for inclusion in the procedures for the benefit of the status “Investment/strategic investor, assisted/special procedure”, under the law on strategic investments, until December 31, 2027.
The proposals submitted to the Parliament on January 24 will first be examined by the parliamentary committees and then passed for approval in the plenary session.
“Given that the interest of the subjects is still very high for this legal package and the flow and stock of foreign investments in the country are at the highest figures compared to the last 10 years, in order to avoid the creation of this legal gap, as and the consequences that may be created by it, it is intended to extend the deadline for submission of requests until December 31, 2027” is written in the report filed in Parliament.
All postponements have had the argument of drafting a new law on investments. But the latest postponement proposed by Shalsi by four years is paradoxical, as it comes three months after the Ministry of Finance announced the drafting of the new legal framework.
“We are also working on drafting a new legal framework for a unified investment law, which aims to make Albania even more attractive for foreign investors, stimulating investments in general and investments in priority sectors,” said Minister of Finance Ervin Mete, during a meeting with the Association of Foreign Investors in Albania regarding the business climate in 2023.
‘Clientelist and anti-property’
The opposition has opposed the controversial law of strategic investments from the beginning. In December 2022, the democratic MP Jorida Tabaku proposed to the Parliament the suspension of the law. But the majority voted against it.
Tabaku says that the law is tailored to the interests of a small clientele and does not offer any added value to the economy.
“This law has no positive record of foreign investments out of 18 decisions of the investment council last year, only 2 are foreign; there is no additional employment, there is only occupation of public and private property” – Jorida Tabaku, Deputy of the Democratic Party.
According to her, the law even violates the Association Stabilization Agreement, fair competition and the free market. While Zef Preçi, who heads the Albanian Center for Economic Research, emphasizes the lack of transparency.
“In the institutions of the Albanian state, the transparency of the achievements and problems of a decade in this field is almost completely missing, especially as regards the actual creation of new jobs and budget revenues provided by the implementation of such contracts”.
The extension of the deadline for the implementation of the law, according to Preçi, should be stopped.
“The fact that more than 2/3 of similar PPP type contracts are under criminal investigation and that over 95% of “strategic” investors are local, most without any experience in the given investment field, is enough to easily understand the potential for violating the public interest”
Ola Xama, an economics journalist and author of the investigative show Kronos, considers the postponement of the deadline for Strategic Investments for the fifth time as a step backwards.
“The law ended up handing out land for no money or at ridiculous values, public and private, to a handful of local businessmen with a track record of success in monopolies or organized crime. 8 years after the implementation of this law, there is no monitoring report of any institution on the impact it has had on the economy. None!” , Ola Xama, economics journalist
DOS has reserves
DASH has also allocated reserves for the status of a strategic investor. The US Department of State, in the latest investment climate report, emphasizes the deep difference between Albanian and foreign beneficiaries.
“AIDA, as the Secretariat of the Strategic Investment Council, serves as a one-stop-shop for foreign investors, from the filing of the application form to the granting of investment/strategic investor status. Despite the supporting legislation, very few foreign investors have benefited from the status of “Strategic Investor” and almost all projects have been awarded to local companies operating in the tourism sector”, the DOS report underlines.
The US Department of State states: “Foreign investors applying for strategic investor status cite that responses from AIDA are slow.”
